SEBI board clears proposal for return of Open Market Buybacks from August 1

SEBI’s board has approved the return of the open-market share buyback route through stock exchanges from August 1. The move will allow listed companies to repurchase shares directly from the market, providing greater flexibility in capital management and shareholder returns. The revised framework includes safeguards such as a 66-day completion timeline, promoter shareholding restrictions and measures to ensure investor protection. The decision aims to improve transparency, simplify buyback execution and enhance efficiency in India’s capital markets. On the announcement, Bir Bahadur Singh Sachar – Partner, JSA Advocates & Solicitors noted that “Permitting open market buybacks represents a significant benefit for companies, as repurchases are executed at prevailing market prices rather than at a predetermined fixed price. This mechanism can be especially beneficial for companies whose current stock price does not fully reflect the underlying value of their business.” Pulkit Sukhramani – Partner, JSA Advocates & Solicitors added that companies seeking to consolidate ownership and enhance stock value may find the open market buyback route particularly advantageous. “Buybacks conducted through stock exchanges not only reduce administrative burdens but also provide greater flexibility regarding both timing and pricing,” he said. Read more